Deals that see advertisers agreeing to commit a proportion of their budget to ITV in return for air-time discounts, could be banned by the Competition Commission if the proposed merger of Carlton and Granada is allowed to go ahead.
The ban is one of a number of suggestions being put forward by the Commission, which is currently investigating whether the creation of a single ITV company, controlling more than 50% of the television advertising market, would be against the public interest (see
ITV Merger Must Clear Regulatory Hurdles).
Such a move would involve a complete block on the so called share deals, which see advertisers or media buyers agree to commit a share of their annual expenditure to ITV, in return for discounts on television ad-spots.
A ban on share deals could potentially make it more difficult for ITV to guarantee levels of expenditure, as deals would have to be done by volume of advertising, rather than share of adspend.
According to one senior broadcast planning director, this would impact negatively on ITV and could change its whole system of trading.
The Competition Commission’s proposals also include a variation on the original suggestion that Carlton and Granada may have to sell their advertising sales houses if the proposed £2.6 billion merger is to go ahead (see Carlton And Granada May Have To Sell Sales Houses).
The revised proposal states that if such a measure were introduced, it would be reviewed after five years by Ofcom and the Office of Fair Trading to see if the conditions which justified it were still current.
In its original letter to Carlton and Granada, the Competition Commission also proposed a complete ban on the merger taking place and a code of conduct designed to protect the smaller ITV licences.
The Competition Commission says that it is seeking views on the cost and practicability of the remedies that have been set out, but emphasises that no conclusion as to whether the proposed merger will operate against the public interest has been made.
Earlier this month Carlton chairman, Michael Green, reportedly threatened to call off the proposed merger with Granada if the two are forced to sell their advertising sales houses (see Carlton Boss Threatens To Halt Planned ITV Merger).
